Zcash Co-Founder Sean Bowe Proposes Ending ZCG Grants Subsidy Over $125M Treasury

Zcash co-founder Sean Bowe on Monday submitted a proposal to end automatic funding for the Zcash Community Grants program, redirecting the remaining 8% share of block subsidies to the network's Network Sustainability Mechanism (NSM).

"It's time to turn off the ZCG funding stream," Bowe wrote on X. "ZCG has over $125M in funding, and will receive millions more before the spigot is turned off. The program was never designed to handle this amount of funding."

Bowe's framing is structural, not adversarial. The draft leaves ZCG's existing treasury untouched and preserves the program's legal ability to honor outstanding commitments. What changes is the inflow: the automatic block-subsidy channel that has fed the program since its creation would close for the remainder of the funding stream's term, without increasing Zcash's issued supply.

What does the proposal actually change for builders?

For developers seeking funding, the practical consequences split along a timeline. ZCG would still control its existing assets and could continue approving grants and meeting outstanding commitments. But the pipeline of future automatic funding — the mechanism that has underwritten the program for nearly six years — would be severed.

The numbers explain the concern. According to the draft proposal, ZCG holds 91,452.98 ZEC and approximately $8.8 million in U.S. dollar-denominated assets, against $2.4 million in outstanding grant liabilities. Bowe said the existing 8% allocation model can yield over $68 million in ZEC annually — a figure that dwarfs the $1.53 million in ZCG expenses the Financial Privacy Foundation reported for the first quarter of 2026. Run the comparison annually and the mismatch becomes stark: the program's reported quarterly outlay annualizes to roughly $6 million, against a subsidy stream capable of delivering more than ten times that amount.

Access routes would formally remain in place. Builders can seek funding through open grants or invite-only grants, with approvals cleared by a five-person committee elected by the Zcash community. The program began as Zcash Open Major Grants in 2020, nearly six years before this proposal.

What stays unchanged, and what comes next?

Two adjacent structures are unaffected. A separate 12% allocation to the Coinholder-Controlled Fund would remain as is, and ZCG's reserves would stay under the committee's control. The proposal is narrowly about the 8% spigot.

The timeline is the key operational detail. The proposal has no assigned activation height and is not included in the currently specified NU7 network upgrade. It would require a future network upgrade to take effect — meaning no immediate change to grant funding, but a defined policy trajectory for the treasury mechanism.

For grant recipients and applicants, the practical question is sequencing: existing commitments appear secure, near-term approvals remain possible from reserves, but the long-term funding architecture now faces a fork between ZCG's accumulated treasury and the NSM as the network's preferred destination for block-subsidy value.

Zcash changed hands at around $1,248 on Tuesday, up 2% over the past 24 hours, according to The Block's price page.

The next observable milestone is whether the proposal gathers community support and a slot in the network upgrade following NU7 — the earliest point at which the 8% stream could legally be redirected.